Investor Activity Spurs New Opportunities

Research & Forecast Report GREENVILLE ANDERSON SOUTH CAROLINA OFFICE Q1 017 Investor Activity Spurs New Opportunities Bryana Mistretta Research Coordinator South Carolina Key Takeaways > > Activity from value add investors will push the expansion of the I85/I85 submarket. > > Experiential workplaces are a popular trend in the national office market and are growing in the Greenville market. Market Indicators Relative to prior period VACANCY NET ABSORPTION Q1 017 Q 017* Suburban Expansion Still on Horizon Aligned along Interstates 85 and 85, Greenville s suburban office market is attractive to employers for its regional connectivity, accessibility and free ample parking. The submarket has an aging inventory that has attracted value add investors as market fundamentals have improved. Upgrades and renovations to existing buildings will continue to raise rental and occupancy rates in the submarket, bringing them to levels sustainable for new development. The last office building was developed in the I85 corridor in 009. Prior to that, only three buildings of 0,000 square feet or larger had delivered since 005. There are currently no new buildings under construction or planned in any of the suburban submarkets, but continued activity from value add investors suggests that new development could come in the future. Due to the rising opportunities for value add investors, the last five years have seen two waves of value add investment sales in the Brookfield, Patewood, Park Central and Park East office parks. The first wave was value add investors that made small upgrades to common areas, such as new carpet, paint and fixtures, bringing the occupancy rate between 80 and 85%. The second wave of investors is active in the market now, purchasing buildings that are approximately 8085% occupied. These investors are improving common areas to increase the occupancy to 9%, with the intent of selling the properties. These value add investors are generating higher net operating incomes at the properties by upgrading and renovating the exterior, landscaping, signage and interior common areas. In turn, the improvements are increasing the rental and occupancy rates in CONSTRUCTION RENTAL RATE** Note: Construction is the change in Under Construction. *Projected **Rental rates for current quarter are for CBD. Rent forecast is for metrowide rents. Summary Statistics Q1 017 Greenville Office Market Market CBD Suburban Vacancy Rate 16.6% 14.1% 18.0% Change From Q4 016 (basis points) Absorption (Thousand Square Feet) New Construction* (Million Square Feet) Under Construction (Thousand Square Feet) *New construction is buildings delivered Asking Rents Per Square Foot Per Year 0 10 50 69.1 8.0 1.1 68 68 7. 7. Overall $19.96 $4.6 $17.85 Change From Q1 015 1% 18.6% 8.8% Class A $.47 $6.99 $0.95 Change From Q1 015 1.% 16. 9.6%

the buildings. Examples are Patewood, which has seen occupancy increase by.0% and rents by 4.% since the start of 016, and Brookfield, which has seen occupancy increase by 1.% and rents by.4% over the same period. These metrics are likely to improve, as over the last six months, secondwave investors have purchased properties in Brookfield Office Park and the entire Patewood Office Park. Two Capital Partners, based in Atlanta, has also purchased two office parks, Park Central (Harbinger) and Park East (Park 7), with the intent of increasing the value of the properties with rebranding, landscaping and improvements to the interior common areas. The two office parks total twelve buildings with 570,00 square feet of space 11% of the submarket s inventory and will likely have a substantial impact on the overall rental and occupancy rates in the submarket. Since 01, the average asking rental rate in the I85 corridor has increased 0% to $18.4 per square foot per year, and occupancy has increased to 8% overall. Because occupancy is rising, there are few large blocks of space available in the submarket. The rental rates, although rising steadily, are still not high enough to support the rising costs of new construction. We believe that the suburban office market will need to reach an occupancy rate of 90% and have a steady rental rate of $4 per square foot to support new development. Continued activity from value add investors in the market suggests that new development is likely in the coming years. Landlords Activate Common Areas Experiential workplaces are a popular trend in the national office market and are growing in the Greenville market as well. Greenville has encouraged mixeduse developments and utilized protective design ordinances to maintain a cohesive look and atmosphere for Main Street. This can be seen in the several office buildings on Main Street that have been transformed into multiuse properties that engage the public and the employees in the building. The recent sale of four prominent downtown buildings brings an opportunity to the new landlords to increase their value and create experiential workplaces by activating the interior lobby and integrating the front entrance with the existing urban fabric. The remaking of Main Street started in 1979 with the completion of a streetscaping project aimed to cohesively combine pedestrian and vehicular traffic along the corridor stretching from Beattie Place to Broad Street. This was done by widening sidewalks for pedestrians, slowing vehicular traffic by reducing Main Street from four to two lanes and providing onstreet parking. In 004, Falls Park and the Liberty Bridge were developed as a publicprivate partnership that has activated the area now referred to as the Heart of Greenville. Over the last twenty years, several buildings have been transformed into mixeduse properties, including the Hyatt Regency Hotel (now NOMA Square), the West End Market, River Place, Poinsett Plaza and the Wells Fargo Center. Owners have activated the interior lobbies with restaurants, retailers, banks and amenities such as gyms that engage the public and tenants in the building. These renovations have increased the occupancy and rental rates at the property, thereby increasing the net operating income. In the fourth quarter of 016, Bank of America Plaza, the Liberty Square Towers and Wells Fargo Center sold to investors. These buildings each have 150,000 square feet or more of office space and have a prominent impact on Greenville s downtown skyline. They also have significant street presence. New investors have an opportunity to increase the net operating income and occupancy of the buildings by mimicking their predecessors. New restaurants and retailers with interior and exterior access will attract employees working in the building and also passersby, increasing foot traffic in the building. Other opportunities to integrate the office building into the urban fabric are adding features, such as landscaping and outdoor seating, that encourage tenants and visitors to spend time at the property, increasing safety with security guards, lighting, crosswalks and implementing traffic calming features. Downtown Overview 1 The Wells Fargo Center, a mixeduse property located at 15 South Main Street, sold in December to Caprocq Greenville, LLC for $. million. The property includes 156,000 square feet of office space, 0,000 square feet of retail space and market rate apartment units. The 196,000squarefoot Bank of America building at 101 N Main Street sold in November to RealOp Investments for $.4 million, or $114. PSF. The last time the building sold was in January of 01 for $9.8 million, or $49.96 PSF. The two Class A Liberty Square buildings, located at 55 and 75 Beattie Place in Greenville s CBD, sold to Lingerfelt Commonwealth Partners in December. The One Liberty Square and Two Liberty Square buildings are 58,000 square feet and 187,600 square feet, respectively. Activated Properties N. ACADEMY STREET PEACE CENTER FALLS PARK ON THE REEDY MAIN STREET 1 THE COMMERCE CLUB N. CHURCH ST. South Carolina Research & Forecast Report Q1 017 Greenville Office Colliers International

Q1 017 Office Market Summary Statistics Greenville, SC MARKET CENTRAL BUSINESS DISTRICT BUILDINGS INVENTORY DIRECT VACANT SUBLEASE VACANT VACANT VACANCY RATE (%) NET ABSORPTION AVERAGE ASKING RENTAL RATE (SF/YR) Class A 6,475,167 69,64 65,614 4,878 1.5% 6,76 $6.99 Class B 14 1,084,658 16,949 0 16,949 15.1% 5,646 $.0 Class C 6 187,06 9,59 0 9,59 15.7% 9,94 $17.7 CBD Total 46,747,11 46,57 65,614 58,186 14.1% 8,0 $4.6 I85/I85 Class A,606,80 04,085,715 07,800 11.8% 8,5 $1.0 Class B 4,057,55 484,409 5,00 57,609 6.1% 5,0 $16.70 Class C 11 44,4,604 0,604 9.5%,00 $15.08 I85/85 Total 77 5,008,075 81,098 56,915 878,01 17.5% 70 $18.4 Class A 8 500,681,64 4,7 7,74 5.5% 4,7 $19.65 Class B 1 69,7 01,44 0 01,44 9.1%,741 $14.49 Class C 7 7,69 51,86 0 51,86.8%,000 $1.60 Spartanburg Total 7 1,40,700 75,90 4,7 80,65 19.8% 1,009 $14.79 SUBURBAN Class A 40 5,174 6,77 8,447 5,174 10.8% 1,985 $0.95 Class B 46 79,051 685,851 5,00 79,051 6.9% 7,764 $16.41 Class C 18 84,440 84,440 0 84,440 14.8% 6,00 $1.71 Suburban Total 104 1,158,665 1,097,018 61,647 1,158,665 18.0% 1,079 $17.85 MARKET Class A 66 670,05 595,991 74,061 670,05 1.0% 50,741 $.47 Class B 60 90,000 849,800 5,00 90,000.5%,118 $17.71 Class C 4 11,799 11,799 0 11,799 15.0% 16,4 $14.76 Market Total 150 1,686,851 1,559,590 17,61 1,686,851 16.6% 69,101 $19.96 The success of multiuse developments in Greenville has paved the way for the success of experiential workplaces with activated interiors and exteriors that are well integrated into the existing cohesive design of Main Street. The continued growth of the trend in Greenville will anchor the string of office buildings and vibrant store fronts along Main Street, creating a walkable and livable downtown. Market Conditions The vacancy rate was 16.6% at the end of the first quarter, down from 16.9% last quarter. The strengthening office market has led to a 5.15% increase in the overall fullservice average asking rental rate since the first quarter of 016 which is now $19.96 PSF/YR. Activity from investors has increased in the Greenville market, driven by these increasing occupancy and rental rates. $6.99 PSF/YR. The vacancy rate was 14.1% at the end of the first quarter, down from 14.5% a year ago. The absorption for the CBD was negative, but Class A space saw nearly 4,000 square feet of positive absorption, due to the delivery of the office space at Falls Park Place and the new Greenville News building at full occupancy. Suburban Conditions The suburban market has recently seen an increase in building purchases from value add investors. The overall vacancy in the suburbs was 18.5% at the end of the fourth quarter, down from 19.5% a year ago. The fullservice average asking rental rate was $17.81 PSF/YR. At the start of the year, the average asking rental rate was $17.09 PSF/YR, a 4.% increase. Downtown Conditions The fullservice average asking rental rate for office space in the Central Business District was $4.6 PSF/YR at the end of the first quarter. Class A space has increased.1% in a year to South Carolina Research & Forecast Report Q1 017 Greenville Office Colliers International

OfficeUsing Employment Officeusing employment, those jobs related to the professional and business services, financial activities and information sectors, is growing within the GreenvilleSpartanburg Metropolitan Statistical Area (MSA). According to the most recent February 017 data from the Bureau of Labor Statistics, there has been an increase of 00 officeusing jobs over the last 1 months. Employment in the financial activities sector has shown an uptick in jobs, increasing by 500 employees over the last 1 months. Although officeusing employment has seen only a slight increase, nonfarm employment in Greenville has increased by 8,500 jobs over the last year, a 1.5% increase. Market Forecast Rising asking rental rates and occupancy rates in the Greenville market are expected to promote further investment sale activity from outofmarket investors over the coming quarters. The recent delivery of three new office buildings in the downtown submarket will impact the tenant mix in downtown office buildings as new tenants move to the market and existing tenants continue to search for higher quality spaces. With few remaining developable sites on Main Street, development will continue to push towards the outer edges of downtown, particularly towards the West End and east of Main. Additionally, market conditions in the I85/I85 market are beginning to tighten. To remain competitive with other available spaces in the market, landlords of suburban office buildings will need to update entryways and amenities within their buildings. Spartanburg will be the area to watch over the next two years, as several new developments move through the pipeline and employers and residents start taking notice. OfficeUsing Employment Greenville and Spartanburg, MSAs OfficeUsing Jobs Added Over 1 Months 6,000 5,000 4,000,000,000 1,000 0 1,000 Feb1 Jun1 Oct1 Feb1 Commercial Real Estate Growth Cycle: Where the market stands and where it is going NEW CONSTRUCTION RENTAL RATE EMPLOYMENT OCCUPANCY Jun1 Oct1 PHASE 1: RECOVERY Feb14 Jobs Added Jun14 Oct14 Feb15 Jun15 Total Employment Source: Bureau of Labor Statistics, Colliers International Oct15 Feb16 Jun16 Oct16 Feb17 570 560 550 540 50 50 510 500 490 480 470 Total NonFarm Employment (Thousands) Around South Carolina South Carolina s office markets are gaining attention from employers, investors and residents. This quarter, activity from investors increased and new tenants have moved in. Charleston, South Carolina > > Road improvements surrounding the Charleston International Airport and Boeing will spur new speculative office development. Columbia, South Carolina > > Lack of traditional office space has encouraged office users to repurpose older buildings in the Main Street District and other downtown corridors such as the Vista, North Main and Devine. Q1 017 Construction Pipeline Greenville PHASE 4: RECESSION COMMERCIAL REAL ESTATE GROWTH CYCLE PHASE : EXPANSION PHASE : HYPERSUPPLY PROPOSED I85/I85 150,000 05,17 55,17 UNDER CONSTRUCTION I85/I85 9, 4,980 7,00 DELIVERED I85/I85 68,000 68,000 For more statewide commercial real estate news check out our market reports at: www.colliers.com/southcarolina/insights 4 South Carolina Research & Forecast Report Q1 017 Greenville Office Colliers International

554 offices in 66 countries on 6 continents United States: 15 Canada: 4 Latin America: 4 Asia Pacific: 1 EMEA: 11 FOR MORE INFORMATION: David Feild, CCIM Market President Greenville +1 864 57 548 David.Feild@colliers.com Liz H. McCary Director of Marketing South Carolina +1 80 401 469 Liz.McCary@colliers.com Bryana Mistretta Research Coordinator South Carolina +1 80 401 45 Bryana.Mistretta@colliers.com $.5 billion in annual revenue billion square feet under management 16,000 professionals and staff GREENVILLE OFFICE PROFESSIONALS: Brantley Anderson Brokerage Associate +1 864 57 5440 Brantley.Anderson@colliers.com Taylor Allen Brokerage Associate +1 864 57 54 Taylor.Allen@colliers.com Colliers International Greenville 55 E. Camperdown Way, Suite 00 Greenville, South Carolina USA +1 864 97 4950 About Colliers International Colliers International Group Inc. (NASDAQ: CIGI; TSX: CIG) is a global leader in commercial real estate services with more than 16,000 professionals operating from 554 offices in 66 countries. With an enterprising culture and significant insider ownership, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide. Services include brokerage, global corporate solutions, investment sales and capital markets, project management and workplace solutions, property and asset management, consulting, valuation and appraisal services, and customized research and thought leadership. Colliers International has been ranked among the top 100 outsourcing firms by the International Association of Outsourcing Professionals Global Outsourcing for 10 consecutive years, more than any other real estate services firm. For the latest news from Colliers International, visit Colliers.com or follow us on Twitter (@ColliersIntl) and LinkedIn. colliers.com Copyright 017 Colliers International. The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.